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Our Organization
STEERING COMMITTEE
MINISTEROF INDUSTRY AND TRADE CR
Chicago
Silicon Valley
BrusselsLondon Cologne
Paris Prague Yokohama
Hong Kong
Czech Republic: EU member
SINGLE MARKET OF 455 million CONSUMERS
Czech Republic
Population 2004 10.2 million
GDP growth 2004 3.1%
Unemployment 2004 10.3 %
Annual inflation 2004 2.9%
Average monthly salary 2003 USD 632
Source: Czech Ministry of Finance, July 20042004 –forecast
old members
new members
Top Location for Offshoring
India (1)
China (2)
Malaysia (3)
Czech Republic (4)
Singapore (5)
Philippines (6)
Brazil (7)
Canada (8)
Chile (9)
Poland (10)
Hungary (11)
Costa Rica (16)
South Africa (17)
Spain (22)
Ireland (23)
People skills andavailability
Business environment
Financial structure
Note: The numbers in the bars are index numbers. The weight distribution for the three categories is 40:30:30, meaning that the financial structure is rated on a scale of 1 to 4, an that business environment, and people skills and availability are on a scale of 1 to 3.
A.T.KEARNEY Offshore location attractiveness index 2004
3.72
3.32
3.09
2.64
1.47
3.59
3.17
1.00
2.99
2.88
2.71
3.06
2.83
1.12
0.62
1.31
0.93
1.77
2.02
2.63
0.92
1.41
2.48
1.68
1.57
1.68
1.33
1.21
2.05
2.48
2.09
1.36
0.73
0.92
1.36
0.94
0.86
1.94
0.70
0.88
0.90
0.67
0.94
1.38
1.39
Czech Republic (4)
Software Development
╌Entered the CR in 1994, acquisition of NetBeans in 1999╌90 software engineers in Prague develop Java Tools for Sun worldwide
╌Software development for parent company in Germany╌50 software engineers in Brno
╌In CR since 1994, Central European expert solution centre in 1998╌More than 100 IT professionals
╌In CR since 1991, European expert solution centre in 2001 ╌investment 8.8 mil. USD╌385 employees
╌European Configuration Centre for EMEA╌IT services – SW and HW support, project management and outsourcing╌250 IT experts in HP Prague
Shared Services
╌ Opened in October 2001 in Prague╌ Provides accounting and financial services to its global clients from the
manufacturing sector╌ Now 450 employees working in 12 languages, 1,500 people by 2008
╌ In CR since 2002, Competence Centre for desktop services, 40 employees
╌ Supports desktop users from countries from Central and Eastern Europe and Scandinavian countries with IT expert services
╌ Opened in September 2004 in Prague╌ Support to global DHL IT systems, one of three DHL strategic data
centres worldwide╌ Wants to employ 1,000 people by 2008
╌ In CR since 2004, in Prague╌ Credit services and IT support, Customer service╌ Now 300 employees, wants to employ 1,300 people in the near future
Selected U.S. investment projects
PRAGUE
JOHNSON CONTROLS
ARROW
LEXMARK
EASTMAN CHEMICALS
TEXTRON
ON SEMICONDUCTOR(MOTOROLA)
VISTEON
AVX
INGERSOLL RANDPHILIP MORRIS
MARS (MASTER FOODS)
HONEYWELL
TYCO
PARKER HANNIFIN
HAYES LEMMERZ
WESTVACO
DELPHI PACKARD
DURA AUTOMOTIVE
PROCTER & GAMBLE
TRW
TRW
OTIS
-
JOHNSON CONTROLS
ITWMETHODE
MERITOR
TECUMSEH
KIMBERLY-CLARK
KIMBERLY-CLARK
GILLETTE
PRAGUE
JOHNSON CONTROLS
ARROW
PRECISION CAST CORP.
LEXMARK
TEXTRON
ON SEMICONDUCTOR(MOTOROLA)
VISTEON
AVX
INGERSOLL RANDPHILIP MORRIS
MARS (MASTER FOODS)
TYCO
HAYES LEMMERZ
WESTVACO
DELPHI PACKARD
DURA AUTOMOTIVE
TRW
TRW
OTIS
OWENS ILLINOIS
JOHNSON CONTROLS
ITWMETHODE
MERITOR
TECUMSEH
KIMBERLY-CLARK
KIMBERLY-CLARK
MANUFACTURINGFACILITY
STRATEGIC SERVICES OR R&D
IBM
TCI
ACCENTURE EDS
BAXTER
TORRINGTON
PITSBURGH CORNING
BRNO
OSTRAVA
LAIRD TECHNOLOGIES
HONEYWELL AEROSPACE
YOUNGER OPTICS EUROPE
ROPER
LEAR
EXXON MOBILE
COLLINS & AIKMAN
Update: 8.12.2004.
Prague airport – the next major hub in Europe?
Number of passengers through Prague airport 1991 - 2004Source : Czech Airport Authority 2005
Investment Inflow
INVESTMENT INCENTIVES for -- Manufacturing -- Technology Centres and Centres of Business Support Services -- Job Creation in Regions Most
Affected by Unemployment
FDI inflows
0
1000
2000
3000
4000
5000
6000
7000
8000
9000
10000
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
Czech Republic Hungary* Poland Slovakia
* Includes estimates of re-invested earnings
Source: Economist Intelligence Unit, 2003
FDI stock per capita as of 2003
4020
3997
2764
2005
1802
1673
1257
1207
1161
462
418
362
Czech Republic
Estonia
Hungary
Slovenia
Croatia
Slovakia
Poland
Latvia
Lithuania
Bulgaria
Romania
Russia
Sources: WIIW, Wiener Institut für internationale Wirtschaftsvergleiche, February 2004
in EUR
Inflow of foreign direct investment
Source: CNB, December 2004
2004 - 2008: Country Forecast, April 2004 Updater, EIU
USD BN
„2006-08: Compliance with EU regulations improves the business environment and sustains foreign direct investment (FDI) inflows of US$3.5bn-4bn annually“. Source: Country Forecast Czech Republic, EIU
0
1
2
3
4
5
6
7
8
9
10
1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
1993 – Q3 2004 USD 42.1 BILLION
Q1 – Q3 2004: USD 3.5 BILLION
Inflow of FDIand exchange rates
Source: Czech National Bank, January 2004, note – exchange rates are not yearly averages, but selected monthly
averages to illustrate the extreme value or trend in that year.
USD BN
34 34 34 34
38
35 3536
3231
32
30 30
29 29
27 27
34
30
35
39
30
26
2223
40
0
1
2
3
4
5
6
7
8
9
1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
0
5
10
15
20
25
30
35
40
45
FDI
EUR
USD
CZK/EURCZK/USD
Cumulative FDI inflow by sector 1993 – 2003
Electricity, gas and water supply 6%
Other 5%
Financial intermediation 20 %
Transport, storage and communications 15 %
Trade, hotels and restaurants 13 %
Real estate and business activities 8 %
Total EUR: 37.818 billion
Source: Czech National Bank, March 2004
Manufacturing 33 %
Investment mediated by CzechInvest by sector
Textiles3%
Automotive45%
Electronics, microelectronics
19%
Chemical, plastic, bitotechnology
10%
Construction2%
Glass2%
Engineering, aerospace,metalworkig
4%
Wood-processing, printing, packaging
5%
Other10%
Source: CzechInvest, October 2004
Investment commitments mediated: 9,839.9 mil. USD
Source: Czech National Bank, March 2004
Cumulative FDI inflow by country 1993 - 2003
Sweden 1%
Other 11%
France 9%
United States 7%
Switzerland 5 %
Belgium 6 %
Austria 11%
Netherlands 13%
Germany 32%
United Kingdom 4% Japan 1%
Total EUR: 37.818 billion
1. Germany2. Netherlands3. Austria
Investment mediated by CzechInvest by country of origin
France6%
Italy, Spain2%
Japan21%
Germany27%
Benelux11%
Canada, Mexico4%
Austria,Switzerland
3%
Taiwan2%
USA8%
Ireland and United Kingdom5%
Denmark, Finland, Norway, Sweden
1%
Czech Republic10%
Source: CzechInvest, October 2004
Investment commitments mediated: 9,839.9 mil. USD
1. Germany2. Japan3. Netherlands
More value added projects
Automotiveindustry
29%
1994 2003
Chemicalindustry
14%
Electricalindustry
29%
Wood-processing Industry
8%
Manufacturing70%
R&D11%
Business supportservices
19%
Construction industry
14%Manufacturing
100%
Top 10 CzechInvest investments
Toyota Peugeot Citroën Automobile Czech, s.r.o.
Japan, France automotive 850.20 2.000 March 2002 Kolín
LG. Philips Displays Czech Republic s.r.o.
Netherlands electronics 628.84 3.250 February 2000 Hranice na Moravě
Škoda Auto a.s. Germany automotive 562.00 600 December 1998
Mladá Boleslav
Nemak Europe s.r.o. Mexico automotive 317.15 1.361 November 2000
Havraň
DENSO MANUFACTURING CZECH s.r.o.
Japan automotive 254.53 936 May 2001 Liberec
BOSCH DIESEL s.r.o. Germany automotive 237.48 1.458 December 2000
Jihlava
Panasonic Mobil & Automotive Systems Czech, s.r.o.
Japan electronics 235.19 1.182 December 2000
Pardubice
DHL Information Services (Europe) s.r.o.
United Kingdom
IT 190.25 866 March 2003 Praha
VDO Česká republika, s.r.o. Germany automotive 178.99 1.900 February 2002 Brandýs nad Labem
Matsushita Electric Works (CZ), s.r.o.
Japan electronics 100.00 900 January 1996 Planá
Czech branch Country Sector Investment (mil. USD)
Jobs Announced Location
Source : CzechInvest, October 2004
Enterprises under foreign control
Continual increase of industrial outputForeign enterprises account for:
-- 35% of employment
-- 47% value added
-- 48 % output
-- 55 % profit
-- Over 70 % of export (EU – 96 %)
Source: Ministry of Industry & Trade, 2002
Czech Contributions to the US and to the World╌Beer battle
╌ over the brand Budweiser – Czech Republic vs Anheuser Busch
╌1900
╌ Niagara Falls power plant manufactured
in Pilsen
╌1961
╌ Soft gel contact lense invented
by Otto Wichterle
Quiz I
How many jet airplanes were produced in the Czech Republic during the last 50 years
A. none, the Czech Republic is not
capable of producing a jet
B. around 500, some of them are still flying today
C. more than 10,000 trainers and fighters
?
Quiz II
40 is the
A. average yearly consumption of beer in the Czech Republic per capita in gallons
B. number of senators in the Czech senate
C. the estimated percentage share of the Czech Republic on European
computer production
Quiz III
The gentleman on this cover of a California band Faith No More 1997 „Album of the Year“ is:
A. Czech philantropist Milos Neruda, who financially supported the band in the 80’s
B. The first Czechoslovak prezident, Tomas Garrigue Masaryk
C. One of the Czech passengers onthe Titanic
CzechInvest, the Investment and Business Development Agency, is an agency of the Ministry of Industry & Trade of the Czech Republic
THANK YOU
Tomas Novak [email protected] www.czechinvest.org